2021 (1) TMI 1305 - HC - Customs

Imposition of anti-dumping duty on the import of the good Flexible Slabstock Polyol from the Kingdom of Saudi Arabia and the United Arab Emirates - methodology used for arriving at the figures of normal value export price and landed value was not informed to the petitioner - insufficient time provided by the Designated Authority to file comments under disclosure statement. Two petitions filed now - in both the petitions the challenge is to the final findings dated 01.09.2020 of the Designated Authority where it was concluded that that the product under consideration has been exported to India from the subject countries below its normal value thus resulting in dumping. HELD THAT - Having surveyed the statutory framework as above we may now advert to the impugned final findings dated 01.09.2020. In the introductory portion of the final findings it is mentioned that Manali Petrochemicals had filed an application before the Designated Authority under the Act read with the Anti-dumping Duty Rules for imposition of anti-dumping duty on the imports of Flexible Slabstock Polyol from the Kingdom of Saudi Arabia and the United Arab Emirates. On the basis of sufficient prima facie evidence submitted by Manali Petrochemicals a public notice dated 18.09.2019 was published in the Gazette of India initiating the investigation. While detailing the procedure followed in the investigation it is mentioned that the period of investigation was from 01.04.2018 to 31.03.2019 (12 months) though the injury investigation period covered three years i.e. 2015-16 2016-17 2017- 18 plus the period of investigation. Designated Authority provided a copy of the non-confidential version of the application to the known producers / exporters and to the governments of the subject countries. Interestingly while the name of Dow Chemical as the importer of the subject good has been mentioned there is no mention about Expanded Polymer Systems as an interested party. However there is acknowledgment that submissions were received from Indian Polyurethane Association. It further mentions that an oral hearing had taken place on 04.03.2020 but another oral hearing was held on 15.07.2020 in view of change of the Designated Authority. It is also stated that the essential facts of the investigation were disclosed to the known interested parties vide the disclosure statement dated 21.08.2020. Claim of confidentiality - HELD THAT - The Designated Authority held that on being satisfied he had accepted confidentiality claims wherever warranted and accordingly those were not disclosed to other interested parties. However he has stated that wherever possible parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. Normal value export price and determination of dumping margin - HELD THAT - It is stated that Designated Authority considered the views of the domestic industry and of the interested parties whereafter normal value export price and dumping margin were determined and disclosed in the form of a table. Designated Authority observed that the dumping margins are more than the de minimis limits. After an analysis of various aspects including factors affecting domestic prices magnitude of injury margin etc. Designated Authority noted that the injury margin is positive and significant for co-operating producer and subject countries for the period of investigation. The law is well settled that be it a quasi-judicial or an administrative body if any decision making affects the rights of a party principles of natural justice have to be followed. Even in those cases where the statutes are silent courts have read into those statutes the need and requirement for adhering to the principles of natural justice to ensure that the decision making process is just fair and reasonable. Section 9C of the Act which we have already extracted above gives right to an aggrieved party to file appeal before the CESTAT under section 129 of the Customs Act 1962 against an order of determination of dumping in relation to import of any article. Sub- section (2) thereof is illustrative. It says that such an appeal shall be filed within 90 days of the date of order under appeal though extendable if the appellant satisfies the CESTAT that it was prevented by sufficient cause from filing the appeal in time. Admittedly in both the petitions the challenge is to the final findings dated 01.09.2020 of the Designated Authority. As per the final findings Designated Authority has concluded that the product under consideration has been exported to India from the subject countries below its normal value thus resulting in dumping. Domestic industry has suffered material injury due to dumping and the material injury has been caused by the dumped imports - Stricto sensu the final findings of the Designated Authority is a recommendation. Such a recommendation cannot be construed to be an order for the purpose of sub-section (2) of section 9C of the Act. It will become an order only upon acceptance of the recommendation of the Designated Authority by the central government and upon issuance of consequential notification. It is from such date that the period of limitation for filing appeal would commence. Prior to issuance of such notification by the central government the final findings of the Designated Authority would remain a recommendation which cannot be construed to be an order. Thus filing of the two writ petitions at this stage appears to be premature. Respondent No. 2 is yet to take a decision on the impugned findings. Certainly respondent No. 2 will have to apply its own independent mind taking into consideration relevant factors and thereafter take a decision on the recommendations one way or the other. Needless to say representations submitted by the parties including the one submitted by Indian Polyurethane Association on 28.09.2020 shall be considered by respondent No. 2 before taking such decision. Petition disposed off.

Summary

Issues Involved:
1. Legality and validity of the final findings dated 01.09.2020.
2. Imposition of anti-dumping duty on the import of Flexible Slabstock Polyol from Saudi Arabia and UAE.
3. Alleged breach of principles of natural justice.
4. Non-consideration of submissions and evidence.
5. Computation of non-injurious price.
6. Non-disclosure of essential facts and insufficient time for comments.
7. Jurisdiction and authority of the Designated Authority.
8. Maintainability of the writ petitions and availability of alternative remedies.

Detailed Analysis:

1. Legality and Validity of Final Findings:
Both writ petitions challenged the final findings dated 01.09.2020 under Article 226 of the Constitution of India. The Designated Authority recommended the imposition of anti-dumping duty on Flexible Slabstock Polyol imports from Saudi Arabia and UAE.

2. Imposition of Anti-Dumping Duty:
The Designated Authority initiated an investigation based on an application by Manali Petrochemicals under the Customs Tariff Act, 1975, and the Anti-dumping Duty Rules, 1995. The investigation aimed to determine the existence, degree, and effect of alleged dumping and to recommend the levy of anti-dumping duty.

3. Alleged Breach of Principles of Natural Justice:
Petitioners argued that the decision-making process was vitiated by several instances of violation of the principles of natural justice, causing serious prejudice. They contended that the proceedings before the Designated Authority are quasi-judicial and must adhere strictly to natural justice principles.

4. Non-Consideration of Submissions and Evidence:
Expanded Polymer Systems claimed that their submissions and evidence on the 'like article' issue were ignored. They argued that the products imported and those manufactured by Manali Petrochemicals were not similar and that no injury was caused to Manali Petrochemicals by the imports. Dow Chemical also contended that essential facts were not disclosed in the disclosure statement, impeding their ability to provide meaningful submissions.

5. Computation of Non-Injurious Price:
Petitioners challenged the methodology used for computing the non-injurious price, alleging violations of rule 6(7) and rule 17 of the Anti-dumping Duty Rules. They highlighted that the Designated Authority did not follow the mandate of Trade Notice No. 10/2018 and raised issues regarding the inclusion of costs incurred by Manali Petrochemicals for environmental compliance.

6. Non-Disclosure of Essential Facts and Insufficient Time for Comments:
Petitioners argued that the Designated Authority failed to disclose essential facts and provided insufficient time for comments on the disclosure statement. They contended that the methodology used for determining normal value, export price, and landed value was not informed, and the time provided to respond to the disclosure statement was inadequate.

7. Jurisdiction and Authority of the Designated Authority:
Petitioners questioned the jurisdiction and authority of the Designated Authority, arguing that the adjustments made to the landed value were beyond the scope of authority. They also raised concerns about the lack of verification of information provided by interested parties.

8. Maintainability of the Writ Petitions and Availability of Alternative Remedies:
The court noted that section 9C of the Customs Tariff Act provides for an appeal before the CESTAT against the order of determination or review regarding the existence, degree, and effect of dumping. The court opined that the final findings of the Designated Authority are recommendations and would become an order only upon acceptance by the central government and issuance of a notification. The court held that the writ petitions were premature and directed the central government to consider the representations submitted by the parties before taking a decision on the recommendations.

Court Orders:
The court directed that no decision shall be taken on the final findings dated 01.09.2020 until the hearing was concluded. The court ultimately disposed of the writ petitions, directing respondent No. 2 to apply its independent mind and consider relevant factors, including representations submitted by the parties, before taking a decision on the recommendations. The interim order was vacated, and the court emphasized the need for adherence to principles of natural justice in quasi-judicial proceedings.